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Russia GDP Growth Slows

Economic growth in Russia slowed in July compared with the previous month, the economy ministry said on Monday.

Gross domestic product grew by 1.5% year on year in July after expanding 2.9% in June, the ministry said, Reuters reported.

A worse performance in the agriculture sector, manufacturing and retail sales all weighed on GDP growth in July, the ministry said in a monthly report on the economy.

“July data should hardly be interpreted as a shift in the positive trend,” the ministry said, adding that industrial production was likely to recover in August.

“Weaker dynamics of agriculture, industry, trade, which was partially offset by growth in construction, contributed to slowdown of economic growth results in comparison with April-June,” the report said.

At the same time, the manufacturing industry was the most pronounced deterioration of the annual dynamics, the ministry said.

According to the Ministry of Economic Development, slowdown of economic activity in Russia in July compared to the Q2 should not be interpreted as a change in the positive trend.

Fitch Ratings global rating agency had upgraded Russia’s GDP growth outlook for this year to 1.6% from 1.4%. In 2018-2019, Russia’s GDP growth rates will exceed 2%, Fitch said in its latest Global Economic Outlook .

Global economic growth will pick up to 2.9% this year and peak at 3.1% in 2018, the highest rate since 2010, the agency said.

“Faster growth this year reflects a synchronized improvement across both advanced and emerging market economies. Macro policies and tightening labor markets are supporting demand growth in advanced countries, while the turnaround in China’s housing market since 2015 and the recovery in commodity prices from early 2016 has fueled a rebound in emerging market demand,” Fitch’s Chief Economist Brian Coulton was quoted as saying.